Damien J. Troyes, The Associated Press
40 minutes ago
A cyclist approaches the New York Stock Exchange (back) in New York, Tuesday, July 9, 2024. Global stock prices were mostly higher, and Japan’s benchmark Nikkei rose 2% to a record high. (AP/Peter Morgan)
NEW YORK (AP) — Stocks were volatile in morning trading on Wall Street Tuesday as Federal Reserve Chairman Jerome Powell testified before the Senate Banking Committee.
The S&P 500 rose 0.2%, the Nasdaq Composite rose 0.4% and the Dow Jones Industrial Average was down 112 points, or 0.3%, as of 10:42 a.m. Eastern time.
Helen of Troy, the consumer goods company that makes Osprey and Oxo products, reported first-quarter results that were far below expectations, causing its shares to fall 30%.
Chipmaker Intel rose 3.5%, following a 6.2% gain on Monday, as bullish analysts suggested its next-generation processors would be in high demand for AI-related products.
In the bond market, government bond yields rose slightly. The yield on the 10-year Treasury note rose to 4.31% from Monday’s close of 4.28%.
Powell’s testimony this week comes ahead of the release of the latest inflation figures on Thursday and Friday, as the central bank keeps interest rates on hold at their highest levels in more than two decades as it cautiously awaits further signs that inflation is still subdued.
Prices have fallen sharply over the past two years as the Fed has raised interest rates, and its goal is to bring inflation down to its 2% target without slowing economic growth too much.
Powell is scheduled to testify on Tuesday and then before the House Financial Services Committee on Wednesday.
Wall Street expects the latest government report, due on Thursday, to show that consumer prices fell to 3.1% in June from 3.3% in May. A report on wholesale-level inflation, before costs are passed on to consumers, is due on Friday.
The Fed is remaining cautious about raising interest rates until it is confident that inflation remains on a benign trajectory. Most inflation measures point to inflation easing, albeit at a much slower pace through 2024. Inflation has been hovering around 3%, continuing to put pressure on consumers, especially lower-income earners.
A strong job market and consumer spending have supported economic growth, but the pace of growth has been slowing. Consumer spending has also weakened as inflation has led many people to prioritize necessities over discretionary spending. Rising interest rates have also made borrowing more expensive, putting added pressure on consumers.
Wall Street is hoping for a rate cut this year that could ease some of the pressure on both consumers and investors. Most experts expect the Fed to cut rates once this year, but not until September. The Fed next meets later this month.
Traders are also keeping an eye on several upcoming earnings reports this week, including Delta Air Lines, which is due to report results on Thursday.
JPMorgan, Citigroup and Wells Fargo are due to report earnings on Friday, and those releases could provide more information about consumer debt levels and whether banks are worried about potential payments or late payments.
